British firm Millennium & Copthorne (M&C) sold out of New York's Plaza Hotel in a $675 million (€546 million) deal yesterday, bidding farewell to a fabled Fifth Avenue address which was, nevertheless, running up losses.
The 97-year-old hotel has hosted some of the world's biggest stars, including Hollywood celebrities Michael Douglas and Catherine Zeta-Jones, who held their wedding reception there.
However, the Plaza's returns were not good enough for M&C, which has a policy of selling assets it considers non-core.
The Plaza ran up a pre-tax loss of $0.9 million for the year ending December 2003, hurt by its high cost base and a slowdown in business linked to the weakening of the US economy.
M&C was not the full owner but held a 50 per cent stake in Plaza Operating Partners, which is selling the hotel on to US property firm El Ad Properties NY LLC. The other 50 per cent of Plaza Operating Partners is owned by Saudi Prince Alwaleed bin Talal.
M&C, which is 52.6 per cent owned by Singapore-based property firm City Developments Ltd, said it would use the proceeds to help cut debt.
Seymour Pierce analyst Mr Paul Leyland kept a "sell" rating on M&C, arguing that the company was currently overvalued, but added that the disposal was a sensible move.
"They're redressing their balance sheet without giving away much cashflow," he said.
The Plaza, which occupies a French Renaissance building near Central Park, has a history of glamour.
Former owners include tycoon Donald Trump.
Movies shot at the hotel include Hitchcock classic North by Northwest as well as The Great Gatsby and Crocodile Dundee.
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